After Autumn Tumble, Economic Sentiment Makes Slight Recovery
Overall economic sentiment recovered slightly after six consecutive weeks of decline. During the past two-week stretch marked by optimism about a COVID-19 vaccine, the HPS-CivicScience Economic Sentiment Index (ESI) inched upwards 1.3 points to 45.7.
There was contradicting movement among the ESI’s five indicators over the past two weeks. Making the biggest gain was confidence in making a major purchase, which rose 4.5 points to 44.9 — the second largest increase over the past year. Also rising were confidence in the overall U.S. economy (up 1.6 points to 46.9) and confidence in finding a new job (up 1.2 points to 36.0). Weighing these improvements down were decreases in the ESI’s other two indicators: confidence in personal finances dropped 0.9 points to 52.8, while confidence in the housing market declined 0.4 points to 47.6.
COVID-19 vaccine news continued to dominate the headlines over the past two weeks, as the U.S. prepares to administer the vaccine in the coming days and the U.K. began injections of the Pfizer vaccine. The good vaccine news comes as the U.S. passed 15 million positive cases of COVID-19, with hospitals in some regions struggling to cope with overcapacity. Meanwhile, stocks hit new highs last Friday even as November jobs data was less positive than expected and the prospect and size of a renewed stimulus bill remains uncertain.
The ESI’s three-day moving average began the two-week period at 46.0 on November 25, gradually declining to it’s two-week low of 43.6 on December 1. The moving average then moved upwards, peaking at 47.3 on December 6, before closing out the two-week stretch at 45.2 on December 8.
The next release of the ESI will be December 23, 2020.